The companies announced plans to develop an electric-powered, medium-duty vehicle that will be launched for the company's US and Canada market in late 2019 or early 2020.

"Our alliance with Volkswagen Truck & Bus is allowing us to move much more quickly into electric propulsion thanks to our ability to leverage their technology investments and components in segments of the market where we're already a leader," said Troy Clarke, Chairman, President and Chief Executive Officer, Navistar.

"We believe the Class 6/7 (medium-duty, ed.) vehicle is ideal for electric powertrain solutions in the near term, given its abundance of packaging space, and that these vehicles typically run short distances and can depot to recharge at the end of the day."

Navistar also announced it is collaborating with its alliance partner on introducing fully integrated, next-generation diesel big bore powertrains for North America launching in 2021.

The two businesses also intend to converge their connectivity activities to a Volkswagen Truck & Bus global connected vehicle platform and launch the cloud-based, brand-independent platform by the end of the year.

According to the companies, this would serve as a 'major step' toward creating a global connected platform – covering roughly 650,000 vehicles worldwide, "making it the world's largest global ecosystem for commercial vehicles, once the migration is completed," Clarke said.

"Future transportation will massively be building on connectivity as this will make our world much more efficient," said Andreas Renschler, CEO of Volkswagen Truck & Bus.

"The ecosystem we are about to create with our common platform will drive our strategic alliance to the next level."

"We're on track to achieve our expected cost savings thanks to our fast start with the procurement JV and the great progress on our technology collaboration," said Clarke.

"As a result, we are in a much more competitive position today in the areas that are quickly revolutionizing our industry globally."

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